Investing.com – Market Overview

The main Wall Street indices look set to start the day with minor gains as investors await the release of the minutes from the last Federal Reserve meeting, as well as nonfarm payroll revisions. Gold continues to hit record highs, while Walmart appears ready to sell its stake in Chinese e-commerce giant JD.com.

1. Fed Minutes, Payrolls Revision to Provide Rate Cuts Insight

Investors are keenly awaiting the release of the minutes from the last Federal Reserve meeting, scheduled for later today. This will provide insights into the likelihood and potential size of an imminent rate cut.

The U.S. central bank maintained its benchmark overnight interest rate in the 5.25%-5.50% range during its last meeting in July. However, comments from Fed officials since then have indicated a possible rate cut in September, which the minutes are expected to reinforce.

Federal Reserve Governor Michelle Bowman expressed cautiousness regarding interest rate cuts, advising against overreacting to recent data indicating easing inflation—caution is still warranted as upside risks remain. Nonetheless, she noted a gradual lowering of the federal funds rate may be warranted if progress on inflation continues.

Additionally, preliminary revisions to U.S. labor data are anticipated, with expectations of a significant downward revision of around 800,000 jobs, suggesting a weaker labor market than previously thought.

2. Futures Edged Higher Ahead of Fed Minutes

U.S. stock futures were marginally up ahead of the Fed minutes release and revisions to payrolls data, as investors look for clues about forthcoming interest rate cuts.

As of 04:20 ET (08:20 GMT), Dow futures rose by 45 points (0.1%), S&P 500 futures climbed by 5 points (0.1%), and Nasdaq 100 futures increased by 10 points (0.1%). The main Wall Street indices closed with small losses the previous day, ending a positive trend.

3. Walmart to Sell Stake in JD.com

Walmart has opted to sell its 5.19% stake in Chinese e-commerce firm JD.com, aiming to raise approximately $3.74 billion. This strategic move will enable Walmart to concentrate on its operations in China, particularly Walmart China and Sam’s Club.

The company had formed a partnership with JD.com in 2016 after selling its online grocery store, Yihaodian, in exchange for a stake in JD. However, JD.com has faced challenges, citing a persistent downturn in China’s retail market.

4. More Retail Earnings in Focus

The U.S. earnings season is nearing its conclusion, with retail giants Target and TJX Companies expected to release their quarterly results soon. Investors will be closely monitoring whether these companies can gain market share during the back-to-school shopping period.

Home improvement retailer Lowe’s recently issued a warning, adjusting its full-year forecast downward, reflecting ongoing challenges in the retail sector.

5. Gold Close to Record Highs

Gold prices experienced slight losses but remain near record highs. By 04:20 ET, spot gold was down 0.2% to $2,509.52 per ounce, and December futures fell 0.1% to $2,547.40 per ounce. Gold’s value has surged by over 20% in 2023, driven in part by expectations of lower U.S. interest rates and geopolitical tensions.

Factors like the freezing of Russia’s foreign currency reserves and significant budget deficits in major economies have made gold more appealing as a safe-haven asset for investors.